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Government boosts cashflow support for small business.

On the 1st May, the Government made an announcement it will provide interest-free loans of $10,000 (and depending on the number of employees it could be up to $100,000) to small businesses under the Small Business Cash Flow Scheme.

The loans are available for a year and will be offered to businesses with 50 or fewer full-time equivalent staff.

The eligibility criteria are the same as for the Wage Subsidy Scheme. Businesses will also have to declare that they are a viable business, they will use the money for core business operating costs and enter into a legally binding loan contract.

The loans are only interest-free if they are paid back within a year. After that, the interest rate will be 3 per cent for a maximum term of five years. Repayments are not required for the first two years.

The scheme will provide a base of $10,000 to every firm plus an addition of $1800 per equivalent full-time employee.

The scheme will be administered by Inland Revenue who will be taking applications from May 12, and will pay out shortly thereafter.

Read ‘What else has the Government done’ to support businesses here: https://www.newshub.co.nz/home/politics/2020/05/covid-19-every-business-in-new-zealand-now-entitled-to-10-000-interest-free-loan.html

Additional resources and information on this loan:

https://www.beehive.govt.nz/release/government-boosts-cashflow-support-small-businesses

https://www.ird.govt.nz/covid-19/business-and-organisations/covid-19-small-business-cashflow-scheme

If you are thinking of applying for this loan, please speak to us first.

Email Karen Tobeck (karen@mc2ca.co.nz), Glynis (glynis@mc2ca.co.nz) or Bruce (bruce@mc2ca.co.nz).